What an eventful year 2010 has proven to be! We saw a new coalition Government take power; we lost yet another World Cup; we saw a number of terrible natural disasters including the Haiti earthquake and the Pakistan floods; volcanic ash grounded our planes; students rioted over tuition fees; the iPhone 4 and iPad were launched; and the winter Olympics were held in Vancouver. But enough about all that – what happened in the Internet industry? Our recap of 2010 highlights some of the most topical issues that affected the industry this year.

Elsa Chen, General Manager

The most controversial of them allLet’s start with arguably the most controversial story of the year – the Digital Economy Bill. We started covering this highly controversial topic back in 2009 but during 2010 we saw this Bill become an Act (DEA) as it was hastily pushed through the pre-election wash-up, much to the dismay of its opponents, which include Entanet. However, there is some good news. A judicial review called for by BT and TalkTalk was granted in November and is expected to be held in April 2011.

Unsurprisingly, the DEA’s supporters are opposing the review and continue to insist that it is satisfactory. Just last week news broke that FAST (Federation Against Software Theft) has organised an event at the House of Commons on 12th January 2011 to ‘discuss’ the topics surrounding the DEA well before the full hearing is expected.

Since the moment the DEA (Digital Economy Act) was passed, when it was hastily rushed through the ‘wash-up’ prior to the general election earlier this year, Entanet and other opposing bodies have been calling for a review. Yesterday the High Court finally announced that a judicial review has been granted.

Darren Farnden, Head of Marketing

The leaders of the DEA opposition have undoubtedly been BT and TalkTalk who jointly requested this review through the courts, arguing the bill was passed without proper scrutiny. Throughout the process they have been supported by a number of ISPs and wholesale communications providers including Entanet, aswell as organisations such as the Open Rights Group (ORG). Commenting on yesterday’s announcement TalkTalk’s Executive Director, Andrew Heaney, said:

“We are very pleased that the Court has recognised that our concerns about the copyright infringement provisions in the Digital Economy Act should be considered in a full hearing. The Act was rushed through Parliament in the ‘wash-up’ with only 6% of MPs attending the brief debate and has very serious flaws.

The provisions to try to reduce illegal file sharing are unfair, won’t work and will potentially result in millions of innocent customers who have broken no law suffering and having their privacy invaded.

We look forward to the hearing to properly assess whether the Act is legal and justifiable and so ensure that all parties have certainty on the law before proceeding.”

Back in May we discussed how Eircom, Ireland’s largest ISP, had been forced into agreeing to implement a 3 strikes policy to tackle illegal copyright infringement following legal action by the IRMA (Irish Recorded Music Association). At the time we were concerned that such a ruling would mean other Irish ISPs would soon be forced to follow suit. However news this week suggests the contrary.

Darren Farnden, Head of Marketing

UPC, Ireland’s second largest ISP, has won its own battle against four major record companies, namely Warner Music, Universal Music, Sony BMG and EMI Records. The High Court in Dublin ruled “there was no precedent in Irish law to force ISPs to identify and disconnect people accused of illegally downloading copyrighted files” meaning UPC cannot be forced to take part in the system.

The current three strikes policy implemented by Eircom consists of an informal warning at the first stage, a stern warning letter at the second and then disconnection form the Internet for 7 days at the third stage. If the user persists then disconnection for one year may be applied.

However, in his ruling, Mr Justice Peter Charleton condemned piracy stating: “This not only undermines the [record companies’] business but ruins the ability of a generation of creative people in Ireland, and elsewhere, to establish a viable living. It is destructive of an important native industry.”

Back in January 2010, we criticised U2 front man Bono for warning all creative types to beware of the evils of the Internet and especially us greedy ISP types when it came to illegal file sharing. We recommended Bono should stick to singing.

It would appear that U2’s manager, Paul McGuinness, didn’t read our opinion as he’s now thrown in his two cents worth of comment within the August issue of GQ magazine. In it he also slams ISPs for “decimating the music industry” and profiteering from online file sharing, whilst also being the cause of recorded music sales falling.

Like Bono, Mr. McGuinness believes illegal file sharing is the reason for ISPs’ increasing profit margins by suggesting “free content has helped fuel the vast profits of the technology and telecoms industries”. However, as we stated in our original Opinion article ‘Bono – Stick to Singing’ (opinion.enta.net: Bono – Stick to singing), in reality broadband customers continue to demand the fastest broadband at the lowest price which squeezes ISPs’ margins. Those of us within the Internet industry will also know that it is actually more costly to support such infringers due to the extra bandwidth they consume. Our increasing revenues are more likely to be down to the innovative new technologies we deploy and the additional services we provide to add value to customers’ experience.

In April 2010 the controversial Digital Economy Bill (DEB) was passed through the parliamentary wash-up and hastily implemented into law, much to the annoyance of many ISPs, Internet users and industry bodies. Then in May we saw history made with a new coalition government taking power. We were initially hopeful that the new government would put right the wrongs of the rushed DEA (Digital Economy Act) but have since seen little in the way of progress. Yet despite this lack of government action, over the last three months the industry news has continued to provide a steady stream of DEA related updates. We take a look at what’s been going on and provide you with an update.

Darren Farnden, Head of Marketing

To repeal or not to repeal?

It appears the proposed tackling of copyright infringement is still the main focus of unease within the DEA. At the end of June, Liberal Democrat MP, Julian Huppert, tabled an Early Day Motion (EDM) to repeal sections 9 – 18, the sections that cover the issue of illegal copyright infringement. Unfortunately the EDM gained little support and appears to have dropped off the radar.

Ireland has become the first nation to introduce a controversial three strikes (well actually four strikes) policy in order to tackle illegal file sharing. The move will see Eircom, the country’s largest ISP, target alleged offenders based on IP address information supplied by IRMA (Irish Recorded Music Association). What makes this particularly concerning is that this ‘policy’ has been introduced following court action against Eircom which saw IRMA win their claim that “Eircom was not doing enough to protect the intellectual property of its [IRMA’s] members.”

Darren Farnden, Head of Marketing

Eircom has now been forced to implement the controversial four strikes policy which will consist of a letter to the alleged culprit followed by a phone call from a dedicated team at Eircom (no prizes for guessing who will pick up the tab for all of this). If the activity persists the customer will be disconnected from the Internet for a week and, if that still does not deter them, they will be disconnected for a whole year. The policy will be reviewed after 3 months when even tougher rules could be implemented including permanent disconnection.

The controversial secrecy surrounding the ACTA (Anti Counterfeiting Trade Agreement) discussions has finally been cleared as last week the EU published working text from the last round of discussions held in Wellington, New Zealand earlier this month.

Darren Farnden, Head of Marketing

Previously the Governments involved have been severely criticised for the secretive manner in which the talks have been held and their refusal to publish any details. After two years they have finally backed down and a working text document has been released. We expressed our concerns regarding this issue in our previous opinion article:

The working text document starts by positioning the purpose of the talks stating “The ACTA initiative aims to establish international standards for enforcing intellectual property rights in order to fight more efficiently the growing problem of counterfeiting and piracy.”

It’s election time and at the moment you can’t turn on the TV, read a newspaper or listen to the radio without being reminded of that fact. Last week saw the launch of several political parties’ election manifestos and whilst the majority of them (notably not the Pirate Party UK) cover a wide range of topical issues we have focussed our investigation on what each party has to say about Digital Britain and the Internet industry. Here is what we found:

Darren Farnden, Head of Marketing

In the red corner: The Incumbents – Labour

Let’s start with the incumbents, Labour. In the past they have been very vocal about their plans for a Digital Britain and their aims to make the UK a world leader in this area. Only last week they controversially rushed through the Digital Economy Bill, now Act (Entanet Opinion:Digital Economy Bill: The end is nigh…). So what are their plans regarding the Internet and Digital Britain if they are re-elected?

So, the Digital Economy Bill has passed its final stage before Royal Assent and is now, for all intents and purposes, going to be made law – much to the dismay of many ISPs and Internet entities including Google and ISPA.

We think it’s laughable that the Bill has been passed through the House of Commons with such speed. After three readings in the House of Lords without prior consultation with those in the Internet access industry and many ill-considered amendments, its passage through the House of Commons has seemingly been accelerated to light speed. The correct political term I believe is ‘pre-election wash up’. This basically means that, whilst we and others have only been able to debate this controversial Bill indirectly, the government has been able to get it passed as quickly as possible before the election. As both of the major political parties agreed on the majority of the clauses within the Bill, they’ve managed to do it easily and with little proper debate, consideration or collaboration with industry.

If there is one thing the Digital Economy Bill has successfully created so far, its controversy. The Bill is still going through the reading stages of the House of Lords and yet every week it appears to spark a new industry argument. The latest being the addition of amendment 120A, which has united the Internet industry in its condemnation.

Darren Farnden, Head of Marketing

Lord Clement-Jones and Lord Razzall proposed the amendment as an alternative to clause 17, which originally awarded substantial powers to the Secretary of State, a fundamental area of concern for many within the industry. We covered the concerns in detail in our earlier opinion article – Mandelson – New master of the digital economy? (Entanet Opinion: Mandelson – New master of the digital economy?). However the Lords’ proposed solution has sparked an equal amount of furious debate.

Amendment 120A could force ISPs to block access to websites where “a substantial proportion of the content accessible at or via each specified online location infringes copyright.” One of the main concerns is that this amendment provides the rights holders with an unfair bias in such cases. Now surprise, surprise we discover the proposal by the Lords was in fact sourced from the BPI (British Phonographic Industry)!